Is Santa About To Deliver New Highs For SPX? Dec 26 Plan
NOTE: This is a re-send of the newsletter for Tuesday December 26, originally sent out on Friday, for those who did not receive.
Santa brought the gift of volatility this year and the last three days of trading before Christmas saw a brief reprise in the one directional grind up we have had for 1.5 months now. On Tuesday and first half of Wednesday, we spent the day basing above 4810ish support. Wednesday, we lost it, triggering the first short in weeks, down to 4745, where the dip was rapidly bought and we returned to 4810ish, right where we started the week.
This last two day rally was likely my final major trade of 2023. Readers recall back on Wednesday right at the close, I got long at 4740-45 and I concluded my newsletter on Wednesday when price was 4747 by writing: “My general lean here is that as long as 4740-45 holds, we can bounce to do some back-testing (4767, 4788, 4810-12 if bulls are lucky)”. Bulls certainly were “lucky” and we got exactly this, rallying to 4810-12 today to conclude the trade, overshooting, then spending most the day glued around this area.
We are now entering “Santa Rally Phase” also known as the holiday trade. This is the lowest volume period of the year, and seasonally, one of the most bullish. In today’s newsletter, I’ll be talking what is next, doing a deep dive into the details that got me long at 4745 on Wednesday for this 65 point rally (its important to know), then talking the actionable plan for Tuesday.